Understanding the Tasmanian energy market

Tasmania is home to one of the most heavily regulated energy markets in Australia. While that means retail competition is virtually non-existent, it at least makes electricity and gas stable and simple to understand. In this article, Canstar Blue introduces you to Tasmania’s energy retailers and distributors, and explains the fundamentals of the Tasmanian energy market.

The difference between retailers, distributors and generators

Before we get underway, it’s worth making a basic point on terminology. The electricity and gas markets can respectively be broken into three tiers – retailers, distributors and generators.

• Generators: Produce the electricity and/or natural gas. Tasmania’s main electricity generator is Hydro Tasmania. Natural gas in Tasmania is imported from a variety of generators on the mainland.
• Distributors: These companies are responsible for delivering the electricity and gas from the generators to the property. Tasmania’s electricity distributor is TasNetworks. There are two gas distributors – Auroura Gas and Tas Gas.
• Retailers: Retailers are responsible for billing and customer services. Key retailers are Aurora – an electricity and natural gas retailer – and Tas Gas, a natural gas retailer.

Can I choose my electricity retailer?

Aurora Energy is currently the only electricity retailer servicing homes in Tasmania. While the Tasmanian government introduced Full Retail Competition in 2014, allowing for other retailers to enter the market and compete for customers, no one has yet come to the table. This is likely because power prices remain regulated. There are other options for businesses, however it’s very limited. These are:

• ERM Business Energy (All businesses)
• Flow Business Energy (For businesses consuming 160 mWh/year+)
• AGL (For businesses consuming 4 GWh/year+).

Aurora also contracts business electricity customers. Businesses using less than 150 mWh are charged the same as residential Aurora customers, while a different pricing structure applies to businesses using more than 150 mWh.

Most experts attribute the lack of residential market competition to price regulation. As it stands, profit margins are too small for new retailers to come to Tasmania. With wholesale power prices rising and the possibility of a price hike, there’s speculation that the government may consider deregulating electricity prices in the future to encourage more competition.

Tasmania Electricity Prices

If you’ve been following the news, chances are you’ve heard of the ‘national energy crises’. Power prices are soaring across most of Australia, putting strain on the cost of living. While Tasmanians have seen a slight increase in the cost of electricity, the state government’s electricity price cap is expected to keep rates reasonable for at least the next few years. With that said, wholesale electricity prices in Tasmania are still rising due to its link with the Victorian wholesale price. That means government price regulation can’t be protected from price hikes forever.

Aurora Electricity Rates

The table below shows Aurora electricity usage and supply charges for Tasmania, with five different tariffs available. A ‘tariff’ refers to the electricity pricing structure. Different rates apply to different tariffs. Below are Aurora’s standard residential electricity prices.

Prices effective July 1 2018. Visit Aurora Energy for more details.

Customers interested in tariff 93 will require a smart meter. It’s also important to point out that tariffs 61 and 62 are controlled load tariffs and don’t operate as a primary electricity tariff.

Can I choose my natural gas retailer?

There are two natural gas retailers in Tasmania – Tas Gas and Aurora Energy. Both retailers supply gas to the full range of customers, including residential, business and industrial. Tas Gas entered the Tasmania market following the introduction of Full Retail Competition back in 2003 and has come to dominate the state with 8,000 customers, accounting for roughly 65% of the market share. Both gas companies have nearly identical prices and services, so your choice of supplier will ultimately come down to the quality of service and personal preference. Although the market is open for new competitors to enter, it seems unlikely Tasmania will see a new gas retailer until the market grows.

Tasmania Natural Gas Prices

The price of natural gas is not regulated, yet there is a negligible difference in price between Tas Gas and Aurora Energy. There are also no published discounts and very little consumer switching. While Aurora is slightly cheaper, as the tables below show, Tas Gas offers generous rebates of between $250 and $1,000 to new customers who install major heating appliances.

Aurora Gas Rates

Tas Gas Rates

Prices effective January 1 2018. Visit Aurora Energy or Tas Gas for more details.

Aurora Energy Tasmania

Aurora Energy is a state government-owned corporation and is Tasmania’s only electricity retailer. Aurora’s prices remain fairly reasonable despite the lack of discounting and competition. It also has several features and options, including:

• Aurora Green: GreenPower products whereby Aurora Energy agrees to source a portion of your electricity from green sources.
• Aurora Online: Aurora’s online management portal
• Aurora PAY AS YOU GO: Pay for electricity credit in advance.

You can read more about Aurora Energy here.

TasNetworks

TasNetworks is again a state government-owned corporation and Tasmania’s only electricity distributor. As a distributor, TasNetworks is responsible for maintaining the poles and wires. TasNetworks is also in charge of checking and maintaining electricity meters.

If you’re having trouble with your electricity meter, you experience a power outage, you want to report a faulty streetlight, or you need clearance to work near power cables, TasNetworks is who you contact – not Aurora.

TasNetworks Solar

Installing solar in Tasmania requires approval from TasNetworks. There are six steps to installing solar in Tasmania:

1. Find an accredited solar installer
2. The Installer submits a connection application with TasNetworks
3. TasNetworks assesses whether solar system meets technical requirements and whether the network can accommodate your solar system.
4. Once approved, the solar installer will begin installation.
5. Before switching the solar system on, TasNetworks will install a digital import-export meter which makes it possible to receive a feed-in tariff.
6. The solar system is switched on and you’re ready to start saving with the power of the sun.

If you want to learn more about solar and how to find a reliable installer, check out our solar buying guide.

TasNetworks Contact information

TasNetworks is available to contact 9am-5pm Monday to Friday. The emergency line operates 24 hours, 7 days a week.

• Emergencies and faults: 132 004
• General enquiries: 1300 127 777
• Customer feedback: 1800 060 399

What’s next for Tasmania’s energy industry?

Tasmania has most of the ingredients for a competitive electricity and gas market, but it’s missing a vital piece – customers. With a population of only half a million, Tasmania is currently too small of a market for most major retailers to invest in. Additionally, while electricity prices are regulated, it’s doubtful a mainland retailer will see much opportunity in Tasmania’s market.

While Tasmanians are severely restricted in retailer choice, there’s plenty other ways to save on energy. Canstar Blue has some useful guides to get you started.

Canstar Blue Energy Guides